Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
Just closed on my first SFH 2 weeks ago and I am AMPED to have finally defeated paralysis analysis and joined the club. Quitclaim deed has been initiated and the property is officially in the LLC's name. Let the fun begin! Here are the dirty details:
Purchase price: $112,502
25% down
3.375% int rate (paid ~ $1,500 in points)
3 bed 2 full bath with 4th
non-conforming bed in the basement
Detached garage and carport
Property taxes $1,127
Insurance $1,050
Property management 5%
Rent $1,250
Vacancy rate 5%
Maintenance and repairs 6%
Oh **** fund 5%
Cash flow $421/month
My main issue going forward (like many fellow investors) is having enough capital to purchase more properties. I am able to find great (> 1% on the 1% rule) properties but I don't want to wait 6 months to save up enough cash. Time to get the BP book on no and low money down and also find some partners!
Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
6y
@Nicholas Sheridan, Jr. in light of your post, we are going to officially relabel the “capex reserve” in our calculators the “oh sh** fund”. This is far more intuitive.
Congratulations on what seems like a great first step!
Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
6y
@Nicholas Sheridan, Jr. in light of your post, we are going to officially relabel the “capex reserve” in our calculators the “oh sh** fund”. This is far more intuitive.
Congratulations on what seems like a great first step!
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Joseph M'Mwirichia I should definitely have considered putting less money down but I was focused on the killer rate. My cash on cash return would have been about 4% higher if I only put down 15% PLUS I would have had an extra $10k for the next deal. Part of the learning curve!
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
Thanks @Ethan Perry I did pay a little over a point to get there and I am kicking myself for not taking another look at putting less down but whatever - sooner I can do a heloc!
@Beth Pagano made a lot of mistakes but can't wait to not repeat them on the next deal! Thanks!
@Nicholas Sheridan, Jr. congrats!! One of the biggest steps. What are some of those mistakes you would like a newbie like me to avoid? What tips do you have to figuring out whether it’s a good deal (and your numbers are real) or you’re just in analysis paralysis?
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Nader Hachem Thanks! I could write a book with all the mistakes I made. I would say the top 3 are: pay really close attention on the inspection and open every window, turn on every light and appliance. The next being don't automatically assume putting down 25% on a SFH is your best bet - I am regretting not putting down less and having more money for the next deal. The third would be use a real estate agent and get their contacts on electricians, hvac etc companies.
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Brad E. very nice! Make sure you put that in an LLC. It took me less than an hour to get everything setup. Also make sure you have a bullet proof operating agreement
Investor · Colonial Heights, VA · Member since 2015 · 78 posts · 53 votes
6y
@Nicholas Sheridan, Jr. Congrats on your first SFH! I was wondering how you got such low rate for a investment property! Did you use a online or portfolio lender?
Flipper/Rehabber · Canton, OH · Member since 2019 · 26 posts · 10 votes
6y
@Nicholas Sheridan, Jr.
Congrats, currently in a similar position as you. Just closed on my first duplex today (FSBO). Got a great deal on it as one side is occupied and another side is down to the studs and construction beginning this week.
Real Estate Broker · Boston, MA · Member since 2020 · 18 posts · 7 votes
6y
@Nicholas Sheridan, Jr. Congrats man! That's awesome - I'm new to real estate investing as well. Seeing you accomplish this and get so excited makes me want to charge on to my first deal even more. Best of luck to your goal of 100!